Merrill man charged with environmental, fraud and tax crimes

 

Date: September 10, 2020

Contact: newsroom@ci.irs.gov

Kevin Shibilski, of Merrill, Wisconsin, is charged with storing and disposing of hazardous waste without a permit, in his capacity as the Chief Executive Officer of 5R Processors, Ltd., a Wisconsin company involved in the recycling of electronic waste from corporate and institutional clients and from manufacturers that participate in a manufacture-take-back program. The indictment alleges that Shibilski illegally stored and disposed of broken and crushed glass from cathode ray tubes that was hazardous due to lead-toxicity at facilities in Wisconsin and Tennessee.

The indictment also charges Shibilski with eight counts of wire fraud by taking in over $5.76 million from clients but failing to recycle over 8.3 million pounds of their crushed glass from cathode ray tubes that had lead in them and instead stockpiling it at 5R Processors' warehouses in Wisconsin and Tennessee. The final count of the indictment alleges that Shibilski conspired to defraud the United States by the nonpayment and evasion of more than $850,000 in employment and income taxes for 5R Processors and its nominee entities.

In related cases, Thomas Drake, of Jasper, Georgia; James Moss, of Ladysmith, Wisconsin; and Bonnie Dennee, of Phillips, Wisconsin, who all held positions with 5R Processors, have been charged with conspiring to store and transport hazardous waste without the required permits. Moss also has been charged with conspiring to evade the payment of employment taxes and income taxes to the Internal Revenue Service. Drake, Moss, and Dennee have entered into plea agreements with the United States. Moss pleaded guilty on September 1, and his sentencing is scheduled for November 13. Plea hearings for Drake and Dennee have not taken place.

If convicted, Shibilski faces a maximum penalty of five years in federal prison on the charge of storing and disposing of hazardous waste without a permit, 20 years on each wire fraud charge, and five years on the tax charge.

The charges against Shibilski are the result of an investigation by the IRS Criminal Investigation; U.S. Environmental Protection Agency, Criminal Investigation Division; and the Wisconsin Department of Natural Resources, Bureau of Law Enforcement. Assistant U.S. Attorney Daniel J. Graber and James Cha with EPA Regional Criminal Enforcement Counsel are handling the prosecution.